LocalBitcoins, one of the most popular peer-to-peer cryptocurrency platform in the world, has been in the negative limelight of the cryptocurrency space for quite some time. The platform was first criticized earlier this year for introducing KYC/ AML and later for removing cash trading option, the reason cited being regulatory compliance.
This ban led to several people in the cryptocurrency community bidding goodbye to the platform. WhalePanda, one of the well-known influencers in the space, stated that the platform was “going down the ShapeShift route”, adding that it was “completely useless now”, during the 20th episode of Magical Crypto Friends. Other members of the segment, Charlie Lee, Samson Mow, and Riccardo Spagni also voiced their opinions of the P2P platform’s move.
The creator of Litecoin, Charlie Lee remarked that there was “no point for LocalBitcoins” without cash trades. He further stated that “they have KYC, they have online trading, then what’s the point of doing LocalBitcoins”. This was soon followed by Mow weighing in, by stating that “it’s just a bad exchange then.”
Further, Riccardo Spagni aka Fluffypony, the lead maintainer of Monero, stated that the platform has been “going down a weird road for a long time”. He went on to state,
“They completely banned local bitcoins access in Germany and then they started insisting on KYC AML for everyone. you know I not a big fan of where they’re going”
This was followed by Lee stating that LocalBitcoins “should be like a decentralized solution,” where it is used by people as a tool to meet up and trade Bitcoins for cash, adding that the “tool should not be dictating” KYC procedure or banning individuals/ countries.
Spagni stated that the problem was that the platform acts as an escrow service, thereby leading the path for regulatory intervention. And Lee remarked that this was the case because the platform wanted to “make money, they want to take a cut of the escrow.”
“Bisq works in the same model […] uses multisig and a number of other things to create an escrow based peer-to-peer transaction but it just doesn’t involve like some sort of centralized party […] so it’s not like local bitcoins couldn’t have pursued that model they just chose not to […]”